Friday, 04 October 2024 16:17

$9.20 milk price forecast!

Written by  Sudesh Kissun
The record milk price - $9.30/kgMS - was paid out in 2021-22 season. The record milk price - $9.30/kgMS - was paid out in 2021-22 season.

ASB has become the first bank to forecast a milk price above $9/kgMS for this season.

Senior economist Chris Tennent-Brown says the bank is lifting its forecast by 60c to $9.20/kgMS. The record milk price - $9.30/kgMS - was paid out in 2021-22 season.

He notes that rather than the downward sloping prices seen across the Global Dairy Trade (GDT) contract curve for whole milk powder prices at earlier events, they are now seeing the curve flatten, with average winning prices above US$3,500 MT over all contracts and WMP products, right through the key part of the season.

“Dairy prices are up significantly on year-ago levels, and we think Fonterra should have been able to already complete the bulk of this season’s USD hedging at a similar effective rate to last season’s US$0.6120. So we think Fonterra’s confidence to lift the milk price forecast range is well placed.

“In fact, we’re lifting our forecast for the season by 60c to $9.20/kgMS. It’d be great to see the previous $9.30 milk price record get broken, but we’ll wait to see a bit more of the season’s price action before calling that.”

He says how Fonterra can manage its product mix will be important, as well as the obvious importance of the trajectory for prices.

“We are not alone in expecting whole milk prices to trend lower at this time of the year, as they often do. But the opposite has been happening as Fonterra is hopefully capturing as much as possible of the very high prices in other products. There’s a balance of risks around any forecast, but at this juncture, we are comfortable to be picking a farmgate milk price in the top half of Fonterra’s forecast range, north of the $9 midpoint.”

More like this

Featured

Hort industry dishes out awards

Research and healthcare initiatives, leadership and dedication to the sector have been recognised in the 2025 Horticulture Industry Awards.

Manuka honey trader posts sour results

Manuka honey trader Comvita slumped to a $104 million net loss last financial year, reflecting prolonged market disruption, oversupply and pricing volatility.

Poultry industry, Govt sign landmark biosecurity deal

The Government has struck a deal with New Zealand's poultry industry, agreeing how they will jointly prepare for and respond to exotic poultry diseases, including any possible outbreak of high pathogenicity avian influenza (HPAI).

National

Machinery & Products

» Latest Print Issues Online

Milking It

Dreams aren't plans

OPINION: Milking It reckons if you're National, looking at recent polls, the dream scenario is that the elusive economic recovery…

Fatberg

OPINION: Sydney has a $12 million milk disposal problem.

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter